Search age:

Search in:

Economy on track for strong growth: Westpac

Growth in the Australian economy looks set to improve in the coming months, a study shows.

The Westpac-Melbourne Institute Leading Index - which indicates the likely pace of economic activity three to nine months into the future - rose to 3.9 per cent in November, from 3.1 per cent the previous month.

This places it above the long-term average of 2.8 per cent.

However, Westpac’s Coincident Index - which measures current growth - was 2.7 per cent, below its long-term average of 3.0 per cent.

Advertisement

Westpac chief economist Bill Evans said he was surprised by the leading index result, which was more optimistic than the bank’s predictions for gross domestic product (GDP) in 2013.

‘‘The Index is sending a somewhat more buoyant growth signal than we currently expect to be the case,’’ he said.

‘‘Over the course of the last six months, the annualised growth rate in the Index has increased from 1.5 per cent (well below trend) to 3.9 per cent (above trend).

‘‘Our current forecast for GDP growth over the course of 2013 is 2.75 per cent, below trend growth in the economy.’’

However, there was likely to be a pickup in mining investment and residential construction in 2013, he said.